TORONTO, July 27, 2011 /CNW/ --
(All amounts expressed in U.S. dollars unless otherwise noted)
Stock Symbol: AEM (NYSE and TSX)
TORONTO, July 27, 2011 /CNW/ - Agnico-Eagle Mines Limited ('Agnico-Eagle' or the 'Company') today reported quarterly net income
of $68.8 million, or $0.41 per share for the second quarter of 2011.
This result includes a non-cash foreign currency translation loss of
$2.7 million, or $0.02 per share and stock option expense of $8.3
million, or $0.05 per share. Excluding these items would result in
adjusted net income of $79.4 million, or $0.47 per share. In the
second quarter of 2010, the Company reported net income of $100.4
million, or $0.64 per share.
The lower net income in 2011 was largely due to a return to normal
levels of tax expense and a foreign currency translation loss versus a
large tax recovery and a large foreign currency translation gain in the
second quarter of 2010.
Second quarter 2011 cash provided by operating activities was $162.8
million ($161.7 million before changes in non-cash components of
working capital), up from cash provided by operating activities of $161.6 million in the second quarter
of 2010 ($138.9 million before changes in non-cash components of
working capital).
The higher cash provided by operating activities in 2011 was primarily
due to a 25% higher realized gold price and significantly higher
byproduct metal prices when compared to those realized in the second
quarter of 2010.
'With the installation of the permanent secondary crusher at Meadowbank,
we have seen a significant improvement in our production rates. Steady
state throughput is now allowing us to focus on cost cutting through
optimization. The Company expects to deliver a strong second half
operationally, with gold production anticipated to increase
approximately 20% over the first half of 2011', said Sean Boyd,
Vice-Chairman and Chief Executive Officer. 'Overall, our corporate
strategy, which created significant value over the past five years,
remains unchanged. Over the next several quarters, we expect to be
able to lay out a new plan which will keep Agnico-Eagle at the
forefront of growth in the gold industry. To that end, we have made a
C$70 million strategic investment in Rubicon Minerals today, and also
plan to enter into a technical services agreement to help advance their
high grade Phoenix deposit in Red Lake, Ontario', added Mr. Boyd.
Second quarter 2011 highlights include:
-- Strong Cash Generation - quarterly cash provided by operating
activities of $163 million, or $0.96 per share
-- Record gold production at Pinos Altos - 51, 066 ounces at $299
total cash costs per ounce
-- Secondary Crusher Operating at Meadowbank - installation
complete in June. Mill operating at approximately 9,250 tonnes
per day in July
-- One of the Best Drillholes from Kittila's Rimpi Zone - Hole
RIE-11-008 returned 7.1 grams per tonne gold over 21.0 metres
true width at 850 metres below surface, approximately 200
metres below the current resource envelope
-- Gold Mineralization Extended at Goldex's D Zone - Intersection
of 3.0 grams per tonne gold over 117.0 metres core length at
1,100 metres depth confirms similarity of D Zone to current
Goldex orebody
Payable gold production(1) in the second quarter of 2011 was 239,328 ounces compared to 257,728
ounces in the second quarter of 2010. A description of the production
and cost performance for each mine is set out further below.
The lower level of production in the 2011 period was largely due to
issues in April relating to the March 2011 fire at the Meadowbank mine
and also due to higher than expected levels of dilution in its pit
during the second quarter of 2011.
Total cash costs for the second quarter of 2011 were $565 per ounce(2). This compares with $482 per ounce in the second quarter of 2010. The
higher cost in 2011 was largely attributable to the issues at
Meadowbank that more than offset the positive impact of higher
byproduct metals prices. Additionally, higher than expected costs have
persisted at Kittila as two shutdowns for maintenance on the autoclave
(one unplanned), higher fuel and electricity prices and high levels of
labour expense (as the mine transitions from contractor to self
mining), offset increased gold production.
For the first six months of 2011, the Company produced 491,690 ounces of
gold at total cash costs per ounce of $548. This compares with the
first half of 2010 when gold production was 445,960 ounces at total
cash costs of $464 per ounce. The higher gold production in 2011 is
mainly due to stronger performances from Kittila (much higher mill
recoveries following a process breakthrough) and Pinos Altos (much
higher mill throughput following the installation of two more tailings
filters). The higher total cash costs are largely a result of high
costs at Meadowbank and Kittila, as previously discussed.
As announced in the June 27, 2011 news release, Agnico-Eagle expects
production of approximately 1.08 million ounces of gold for the full
year 2011 at total cash costs per ounce of approximately $495.
Second Quarter 2011 Results Conference Call and Webcast Tomorrow
The Company's senior management will host a conference call on Thursday,
July 28, 2011 at 11:00 AM (E.D.T.) to discuss financial results and
provide an update of the Company's exploration and development
activities.
Via Webcast:
A live audio webcast of the meeting will be available on the
Company's website homepage at
www.agnico-eagle.com.
Via Telephone:
For those preferring to listen by telephone, please dial
416-644-3416 or Toll-free 800-814-4861. To ensure your
participation, please call approximately five minutes prior to the
scheduled start of the call.
Replay archive:
Please dial 416-640-1917 or Toll-free 877-289-8525, access code
4403802#.
The conference call replay will expire on August 28, 2011.
The webcast along with presentation slides will be archived for 180
dayson the website.
Cash Position Remains Strong
Cash and cash equivalents increased to $139.0 million at June 30, 2011,
up from the March 31, 2011 balance of $114.8 million.
Capital expenditures in the second quarter of 2011 were $114.4 million,
including $31.1 million at Meadowbank, $22.6 million at LaRonde, $18.9
million at Kittila, $14.3 million on Goldex, $9.7 million at Pinos
Altos and $4.4 million at Lapa.
Full year 2011 capital expenditures are expected to total $423 million,
up from the December 15, 2010 estimate of $313 million. Major
components of the increase include:
-- The impact of foreign exchange movements - $25 million
-- Change in dyke design at Meadowbank - $21 million
-- Soil settlement remediation at Goldex - $19 million
The remaining amounts are largely accelerated capital previously
expected to be spent in 2012 and amounts relating to the Meadowbank
fire (of which approximately $10 million may be recovered through
insurance).
With its current cash balances, anticipated cash flows and available
bank lines, management believes that Agnico-Eagle remains fully funded
for the development and exploration of its current pipeline of gold
projects in Canada, Finland, Mexico and the USA.
Available bank lines as of June 30, 2011 were approximately $1.2
billion.
Agnico-Eagle today agreed to invest C$70 million in the common shares of
Rubicon Minerals Corporation ('Rubicon') in a non-brokered private
placement. As a result of the transaction, Agnico-Eagle will own
21,671,827 shares of Rubicon, or approximately 9.2% of the basic shares
outstanding. Additionally, the Company plans to enter into a technical
services agreement with the goal of advancing Rubicon's Phoenix gold
project in Red Lake, Ontario.
LaRonde Mine - Strong Cash Flow Generation Continues
The 100% owned LaRonde mine in northwestern Quebec, Canada, began
operation in 1988. Overall, proven and probable gold reserves at
LaRonde contain approximately 4.8 million ounces from 34.7 million
tonnes grading 4.3 grams per tonne ('g/t').
The LaRonde mill processed an average of 6,587 tonnes per day ('tpd') in
the second quarter of 2011, compared with an average of 7,254 tpd in
the corresponding period of 2010. The lower throughput was largely due
to a planned five day maintenance shutdown and also due to an unplanned
slowdown due to the declaration of force majeure by the mine's cyanide
supplier. While the supply contract remains under force majeure,
alternative suppliers have been contracted and the mine is no longer
impacted.
Minesite costs per tonne(3) were approximately C$84 in the second quarter of 2011. These costs are
higher than the C$79 per tonne experienced in the second quarter of
2010. The increase is largely due to the 9% lower throughput in 2011,
as discussed above.
On a per ounce basis, net of byproduct credits, LaRonde's total cash
costs per ounce were $231 in the second quarter of 2011 on production
of 27,525 ounces of gold. This compares with the second quarter of
2010 when total cash costs per ounce were $270 on production of 41,533
ounces of gold. The decrease in total cash costs is largely due to
significantly higher byproduct metal prices which more than offset
lower byproduct metal production. The lower gold production in the 2011
period is largely related to planned mining of lower grade areas for
much of the year and also due to lower second quarter throughput, as
discussed above. Higher grades are scheduled for the fourth quarter of
2011 with the first production of the higher grade LaRonde Extension.
Considering currently high byproduct metals prices, the mine is expected
to maximize the contribution of its zinc and silver ores. This may
extend the mine's life and benefit the total cash cost per ounce.
Post-2011, LaRonde is expected to ramp up to an average life of mine
production of 338,000 ounces of gold per year, reflecting the higher
gold grades at depth.
Goldex Mine - Low Cost Underground Mine
The 100% owned Goldex mine in northwestern Quebec began operation in
2008. Proven and probable gold reserves total 1.6 million ounces from
27.8 million tonnes grading 1.8 g/t.
The Goldex mill processed an average of 8,448 tpd in the second quarter
of 2011. During the second quarter of 2010, the plant processed 7,327
tpd. The mill has now demonstrated that it can sustain approximately
8,000 tonnes per day following the installation of a permanent
secondary crusher and additional tailings pump capacity in the first
quarter of 2010.
Minesite costs per tonne at Goldex were approximately C$20 in the second
quarter of 2011, lower than the C$24 incurred in the second quarter of
2010. These lower unit costs were largely related to the 15% higher
throughput in the mill.
Payable gold production in the second quarter of 2011 was 41,998 ounces
at total cash costs per ounce of $385. This compares to second quarter
2010 gold production of 48,334 ounces at total cash costs per ounce of
$325. The decrease in gold production is due to the mining of lower
grade material during the 2011 period which also negatively impacted
the total cash costs per ounce. The higher total cash costs are largely
due to the lower gold production.
Grouting of a shear zone is underway to reduce the water inflow to the
underground mine. This water flow has caused soil settlement issues at
the minesite as previously saturated soils around the minesite are
draining. However, flow rates have been controlled as remediation
continues.
Goldex's D Zone Continues to Grow
Ongoing exploration at Goldex has resulted in significant success from
the D Zone, the large mineralized body directly below the current
mining operation. The initial gold resource at the D Zone is 14.4
million tonnes grading 1.62 g/t in the inferred category (or 746,000
ounces of gold), as of December 31, 2010.
Incorporating recent results, the top of the D Zone is now approximately
840 metres below surface, and it has been traced to a depth of 1,350
metres below surface. The zone is estimated to be approximately 350
metres wide and between 60 metres and 120 metres thick, as shown on the
linked Goldex longitudinal section.
[Goldex - Composite Longitudinal section] Link to image
The present dimensions and grade of the D Zone appear to be similar to
the Goldex orebody.
The 2011 exploration program at Goldex includes a 300-metre exploration
ramp and 12,000 metres of drilling from the ramp. Ramp construction
began in April 2011 and should be completed by the end of this year.
Drilling from the ramp is expected to begin in the third quarter.
Drilling in 2011 has located mineralization outside of the resource
envelope and the deposit remains open at depth. Twenty-one holes
(11,272 metres) were drilled in the D Zone during the second quarter.
Selected results are shown in the table below, with the pierce points
of these drill holes shown on the longitudinal section for the Goldex
Mine.
Significant recent Goldex D Zone drill results
_____________________________________________________________________
|Drill Hole|Zone| Purpose | From | To |Core length*|Gold grade|
| | | |(metres)|(metres)| (metres) | (g/t) |
| | | | | | | (uncut) |
|__________|____|___________|________|________|____________|__________|
|73-426 | D |exploration| 496.5| 613.5| 117.0| 3.02|
|__________|____|___________|________|________|____________|__________|
|73-427 | D |exploration| 525.0| 637.5| 112.5| 1.84|
|__________|____|___________|________|________|____________|__________|
|73-429 | D |exploration| 634.5| 711.0| 76.5| 1.48|
|__________|____|___________|________|________|____________|__________|
|84-023 | D |exploration| 285.0| 463.5| 178.5| 1.32|
|__________|____|___________|________|________|____________|__________|
| incl | D | | 394.5| 463.5| 69.0| 1.70|
|__________|____|___________|________|________|____________|__________|
|84-067 | D |exploration| 337.5| 457.5| 120.0| 1.50|
|__________|____|___________|________|________|____________|__________|
| incl | D | | 337.5| 399.0| 61.5| 2.40|
|__________|____|___________|________|________|____________|__________|
|76-013** | D |exploration| 511.5| 751.5| 240.0| 2.47|
|__________|____|___________|________|________|____________|__________|
| incl | | | 613.5| 733.5| 120.0| 3.09|
|__________|____|___________|________|________|____________|__________|
|76-014** | D |exploration| 655.5| 847.5| 192.0| 2.17|
|__________|____|___________|________|________|____________|__________|
| incl | | | 655.5| 753.0| 97.5| 3.07|
|__________|____|___________|________|________|____________|__________|
*Cannot determine true width yet, as the geometry of the D Zone not fully understood.
** Holes 76-013 and 76-014 were previously released in the April 28, 2011 press release.
Several recent holes confirm the strong continuity of mineralization
within the resource envelope. Hole 73-426 intersected 117.0 metres
core length grading 3.0 g/t gold, which is one of the highest grade
intercepts in the D Zone. Hole 73-427 intersected 112.5 metres grading
1.8 g/t gold at 1,056 metres below surface, showing broad
mineralization up to the western limit of the zone.
Three recent holes located thick mineralization outside of the current D
Zone resource envelope, some with grades higher than those from past
holes within the D Zone. Twenty-five metres east of the current
resource, hole 84-067 had an intercept of 61.5 metres grading 2.4 g/t
gold at 1,115 metres depth. Hole 73-429, 70 metres west of the current
resource, at 1,170 metres depth returned 76.5 metres of core length
grading 1.5 g/t gold. Holes 76-013 and 76-014, which were previously
released, showed that the mineralization continues below the current
resource envelope in thick widths and higher grade.
The success of the exploration program to date has the potential to
significantly increase the reserves and mine life at Goldex. The
Company is considering extending the underground ramp beyond the
currently planned 300 metres to provide additional drill platforms.
The Company will also conduct a preliminary assessment during the
second half of 2011 regarding the viability of mining the D Zone and to
guide exploration in 2012.
Kittila Mine - Cost Reduction the Focus
The 100% owned Kittila mine in northern Finland achieved commercial
production in May 2009. Proven and probable gold reserves total
approximately 4.9 million ounces from 32.7 million tonnes grading 4.6
g/t.
The Kittila mill processed an average of 2,561 tpd in the second quarter
of 2011 as compared to its 3,000 tpd design rate. In the second
quarter of 2010, the Kittila mill processed 2,412 tpd. The mill
throughput was below design rate largely due to two maintenance
shutdowns (totaled 15 days) for work on the autoclave. The mine is
systematically upgrading and modifying the agitator mechanisms to
reduce the possibility of future failures. The mill has been operating
normally at approximately 3,200 tpd and recoveries have averaged 83%
since the repairs were completed on June 14th.
Gold recoveries in the second quarter of 2011 were 82.7%, essentially at
the design rate of 83%. This compares with the second quarter of 2010
when the recoveries were approximately 68%. This improvement in mill
recovery was largely due to a change in the process that improved the
feed to the autoclave.
Minesite costs per tonne at Kittila were approximately €79 in the second
quarter of 2011, compared to €64 in the second quarter of 2010. The
increase in minesite costs was largely due to low mill availability and
mill production because of unplanned maintenance shutdowns and a
significant draw-down of the ore stockpile due to a slowdown in mining
of the Suuri pit during remediation of the east wall (the Suuri pit is
back to normal operations). Additionally, the minesite costs were high
due industry-wide cost pressure on items such as fuel and
electricity costs, material costs underground and high contractor
costs.
Now that the mine is operating at steady state, the focus going forward
will be on reducing the minesite costs. Changes in the mining
operation and some specific measures that are expected to contribute to
lower costs going forward include:
-- mill efficiencies and increased throughput
-- eliminating or significantly decreasing the use of contractors
-- other optimization and efficiencies
These factors and initiatives are expected to reduce the ongoing
minesite cost per tonne at Kittila between €10 and €20 in the next
twelve months.
Second quarter 2011 gold production at Kittila was 30,811 ounces with a
total cash cost per ounce of $850. In the second quarter of 2010 the
mine produced 31,593 ounces at total cash costs per ounce of $607. The
lower gold production and higher costs were largely the result of lower
throughput in the second quarter of 2011 combined with the cost issues
mentioned above. Total cash costs per ounce were also unfavorably
impacted by a weaker US dollar (USD per Euro of 1.27 in Q2 2010 vs 1.44
in Q2 2011)
Drill Intersections Continue to Indicate Reserve Growth
Recent exploration drilling at Kittila has resulted in one of the best
intercepts ever reported from the property, showing that the Rimpi zone
could become a significant source of gold reserves in the future.
Hole RIE-11-008 returned 7.1 g/t gold over 21.0 metres true width at 850
metres below surface. This hole is located approximately 200 metres
beneath the current resource envelope at Rimpi and approximately 1.4
kilometres north of the current resource envelope at this depth. The
Rimpi deposit is open at depth and along strike. Other drilling such
as holes RIM-10-003B, RIM-10-009 and RIM-10-010 show that the Rimpi
Zone continues to grow at shallower depths as well. The focus of the
exploration program at Rimpi for the rest of the year will be to
continue to define and expand this zone of high grade mineralization.
Rimpi - Deep Drill Results
_____________________________________________________________________
| | | | From | To |Estimated|Gold (g/t) |
|Drill Hole |Lens | Purpose |(metres)|(metres)| True | (uncut*) |
| | | | | | Width | |
| | | | | |(metres) | |
|___________|_____|___________|________|________|_________|___________|
|RIM-10-003B|Rimpi|exploration| 679| 685| 4.0| 3.64|
| |South| | | | | |
|___________|_____|___________|________|________|_________|___________|
|RIM-10-010 |Rimpi| conversion| 606| 615.2| 6.2| 9.93|
| |South| | | | | |
|___________|_____|___________|________|________|_________|___________|
|RIM-100-09 |Rimpi| conversion| 474| 485| 5.7| 6.28|
| |South| | | | | |
|___________|_____|___________|________|________|_________|___________|
|RIE-110-08 |Rimpi|exploration| 909| 916| 4.1| 3.23|
|___________|_____|___________|________|________|_________|___________|
| and | | | 949| 1007| 21.0| 7.10|
|___________|_____|___________|________|________|_________|___________|
*Note: all drill results at Kittila are reported as uncut gold grades
[Kittila long section] Link to image
Recently, there are also strong drill results within and nearby the
Roura resources, including hole ROU-09-002F that yielded 9.3 g/t gold
over 11.2 metres, and hole ROU-10-036D that yielded 6.0 g/t gold over
7.8 metres. These results are expected to increase the mineral
resources from Kittila.
Roura Drill Results
_____________________________________________________________________
| | | |From |To |Estimated |Gold |
|Drill Hole |Lens |Purpose |(metres)|(metres)|True Width |(g/t) |
| | | | | |(metres) |(uncut)|
|___________|_______|___________|________|________|___________|_______|
|ROU-09-002F| Roura|exploration| 697| 719| 11.2| 9.32|
| |Central| | | | | |
|___________|_______|___________|________|________|___________|_______|
| and | Roura| | 756| 768| 6.2| 3.47|
| |Central| | | | | |
|___________|_______|___________|________|________|___________|_______|
|ROU-100-36D| Roura|exploration| 1074| 1091| 7.8| 5.98|
| | North| | | | | |
|___________|_______|___________|________|________|___________|_______|
The Kittila exploration program will be accelerated with the addition of
a 2,400-metre exploration ramp built over a three-year period from the
Suuri zone to the Roura zone between 500 metres and 800 metres depth.
This ramp will improve access for deep drilling in the Suuri, Roura and
Rimpi zones. Underground ramp development began in early April and
drilling from the ramp is expected to begin later this year.
A feasibility study regarding a 50% increase in mill throughput at
Kittila is expected to be reviewed in the fourth quarter of 2011. The
exploration results from the first half of 2011, particularly the
downward extension of the Rimpi zone, could enhance the economics for
the study. With the continued success expanding the mineralization to
the north and at depth, the Company is already considering a second
expansion, likely involving the sinking of a shaft. This study for
this expansion opportunity is expected to begin in 2012.
Lapa - Record Quarterly Throughput
The 100% owned Lapa mine in northwestern Quebec achieved commercial
production in May 2009. Proven and probable gold reserves total
approximately 0.7 million ounces from 2.8 million tonnes grading 7.4
g/t.
The Lapa circuit at the LaRonde mill processed an average of 1,763 tpd,
a quarterly record, in the second quarter of 2011. This compares with
an average of 1,523 tonnes per day in the second quarter of 2010 as
Lapa continues to exceed its design throughput of 1,500 tpd.
Minesite costs per tonne were C$102 in the second quarter of 2011,
compared to C$118 in the second quarter of 2010. The lower cost is
largely due to the increased throughput, as discussed above.
Payable production in the second quarter of 2011 was 28,552 ounces of
gold at total cash costs per ounce of $599. This compares with the
second quarter of 2010, when production was 28,927 ounces of gold at
total cash costs per ounce of $545. The decrease in gold production
and increase in costs is largely due to the decrease in grade, partly
offset by the increase in mill throughput. The lower grade was largely
due to lower grades in the 2011 mineral reserve model. The lower
grades in the model largely reflect a higher gold price and therefore a
lower cut off grade for reserves (reserve grade dropped to 7.4 g/t for
year-end 2010 versus 8.2 g/t for year-end 2009).
Pinos Altos - Record Gold Production at Low Costs
The 100% owned Pinos Altos mine in northern Mexico achieved commercial
production in November 2009. Proven and probable reserves, including
the stand-alone, heap leach, Creston Mascota mine, total 3.3 million
ounces of gold and 92.0 million ounces of silver from 44.2 million
tonnes grading 2.3 g/t gold and 64.8 g/t silver.
The Pinos Altos mill processed an average of 4,711 tpd in the second
quarter of 2011. This compares favourably with 3,575 tonnes per day in
the second quarter of 2010. The mill is now routinely performing at
process rates above the initial design capacity of 4,000 tpd following
the installation of two additional tailings filters in the third
quarter of 2010.
Minesite costs per tonne were $28 in the second quarter of 2011,
compared to $28 in the second quarter of 2010.
Payable production in the second quarter of 2011 was a record 51,066
ounces of gold at total cash costs per ounce of $299, including the
satellite Creston Mascota operation. This compares with production of
29,665 ounces at a total cash cost of $365 in the second quarter of
2010. The higher gold production and lower costs are largely due to
the inclusion of Creston Mascota and the increased mill throughput.
The first gold production from Creston Mascota occurred during the
fourth quarter of 2010. In the second quarter of 2011, payable gold
production from this heap leach operation was 9,449 ounces (included in
the Pinos Altos total above). Commercial production at Creston Mascota
was achieved on March 1, 2011.
Due to the improved mill capacity and the increased underground ore
reserve tonnage at Pinos Altos, the Company is evaluating alternatives
with respect to increasing the underground mine capacity either through
an additional production ramp or via a production shaft. The study is
expected to be completed near the end of 2011.
Meadowbank - Permanent Secondary Crusher Now Operating
The 100% owned Meadowbank mine is located in the Nunavut Territory in
northern Canada. Proven and probable gold reserves total 3.5 million
ounces from 34.1 million tonnes grading 3.2 g/t. An additional 9.1
million tonnes grading 1.0 g/t (or 0.3 million ounces) of indicated
gold resources are within the currently contemplated pit limits.
The Meadowbank mill processed an average of 7,332 tpd in the second
quarter of 2011 despite the March 2011 fire which impacted operations
through April. This compares with the second quarter of 2010 when the
mine processed approximately 6,262 tpd. The increase in throughput was
largely due to the fact that the second quarter of 2010 was the mine's
first full quarter of production and it was still undergoing normal
ramp up at that time.
Minesite costs per tonne were C$81 in the second quarter of 2011 as
compared to the second quarter of 2010 when minesite costs per tonne
were C$94. The lower costs in the 2011 period are largely due to the
increase in the mill throughput and increased productivity in the pit.
Payable production in the second quarter of 2011 was 59,376 ounces of
gold at total cash costs per ounce of gold of $910. This compares with
payable production of 77,676 ounces at total cash costs of $663 per
ounce in the second quarter of 2010. The decrease in gold ounces and
increase in cost was largely due to the mining of 34% lower grades in
the 2011 period. Part of the reason for lower grades was the scheduled
mining of lower grade mining blocks, but also partly due to dilution
issues identified during the second quarter of 2011.
These costs are expected to decline dramatically in 2011 as throughput
has improved significantly with the installation of the permanent
secondary crusher in June, 2011. The design rate of 8,500 tpd is
expected to be achieved on a steady state basis going forward. In
fact, to date in July the mill has averaged 9,257 tpd at head grades of
3.08 g/t (reserve grade of 3.2 g/t) and costs have declined
accordingly.
Additionally, changes to the blasting techniques have already improved
the dilution situation at the mine. While it is still early,
significant improvement in blast displacement has been observed. As a
result, actual grades are currently closer to what was predicted in the
reserve model. Further refinement of blasting procedures and
reconciliation is ongoing.
Dividend Record and Payment Dates for the Remainder of 2011
________________________
|Record Date|Payment Date|
|___________|____________|
|September 1|September 15|
|___________|____________|
|December 1 |December 15 |
|___________|____________|
Dividend Reinvestment Program
Please follow the link below for information on the Company's dividend
reinvestment program.
DividendReinvestmentPlan
About Agnico-Eagle
Agnico-Eagle is a long established, Canadian headquartered, gold
producer with operations located in Canada, Finland and Mexico, and
exploration and development activities in Canada, Finland, Mexico and
the United States. The Company has full exposure to higher gold prices
consistent with its policy of no forward gold sales and maintains a
corporate strategy based on increasing shareholder's exposure to gold,
on a per share basis. It has paid a cash dividend for 29 consecutive
years. www.agnico-eagle.com
AGNICO-EAGLE MINES LIMITED
SUMMARY OF OPERATIONS KEY PERFORMANCE INDICATORS
(thousands of United States dollars, except where noted, US GAAP basis, Unaudited)
Three months ended Six months ended June 30,
June 30,
2011 2010 2011 2010
Gross mine profit
(exclusive of
amortization shown
below) (Note 1)
LaRonde $46,017 $43,614 95,000 $89,001
Goldex 46,739 42,635 87,072 69,059
Lapa 27,737 20,204 46,915 41,477
Kittila 18,934 16,625 46,765 28,095
Pinos Altos (Note 52,568 22,626 99,827 35,257
2)
Meadowbank 28,942 35,179 58,859 37,350
Total gross mine 220,937 180,883 434,438 300,239
profit
Amortization 59,235 44,003 121,164 74,506
Corporate 56,936 28,331 131,146 75,910
Income before tax 104,766 108,549 182,128 149,823
Tax provision 35,941 8,189 68,039 27,131
Net earnings $68,825 $100,360 $114,089 $122,692
Net earning per $0.41 $0.64 $0.68 $0.78
share
Operating cash $162,821 $161,574 $333,864 $236,065
flow
Realized price per
sales volume (US$):
Gold (per ounce) $1,530 $1,222 $1,466 $1,168
Silver (per $38.50 $19.29 $37.31 $18.94
ounce)
Zinc (per tonne) $2,257 $1,890 $2,340 $2,057
Copper (per $8,565 $6,581 $9,377 $6,934
tonne)
Payable production:
Gold (ounces)
LaRonde 27,525 41,533 64,418 86,569
Goldex 41,998 48,334 80,498 90,603
Lapa 28,552 28,927 55,466 60,480
Kittila 30,811 31,593 71,128 56,140
Pinos Altos (Note 51,066 29,665 99,067 55,893
2)
Meadowbank 59,376 77,676 121,113 96,275
Total gold 239,328 257,728 491,690 445,960
(ounces)
Silver (000s
ounces)
LaRonde 736 860 1,416 1,735
Pinos Altos (Note 452 248 858 470
2)
Meadowbank 13 12 26 14
Total silver 1,201 1,120 2,300 2,219
(000s ounces)
Zinc (tonnes) 14,678 18,465 26,619 32,689
Copper (tonnes) 666 1,056 1,483 2,108
Payable metal sold:
Gold (ounces - 28,589 41,666 66,048 86,906
LaRonde)
Gold (ounces - 41,564 48,310 83,459 86,173
Goldex)
Gold (ounces - 29,749 31,920 55,525 66,113
Lapa)
Gold (ounces - 29,794 28,588 70,492 59,262
Kittila)
Gold (ounces - 48,847 30,634 94,331 51,599
Pinos Altos)
(Note 2)
Gold (ounces - 58,767 70,182 120,695 77,285
Meadowbank)
Total gold 237,310 251,300 490,550 427,338
(ounces)
Silver (000s 726 884 1,405 1,659
ounces -
LaRonde)
Silver (000s 428 267 837 487
ounces - Pinos
Altos) (Note 2)
Silver (000s 14 14 35 14
ounces -
Meadowbank)
Total silver 1,168 1,165 2,277 2,160
(ounces)
Zinc (tonnes) 16,649 15,437 24,951 29,966
Copper (tonnes) 658 1,043 1,478 2,090
Total cash costs
per ounce of gold
(Note 3):
LaRonde $231 $270 $92 $216
Goldex $385 $325 $407 $348
Lapa $599 $545 $614 $516
Kittila $850 $607 $758 $663
Pinos Altos $299 $365 $306 $384
Meadowbank $910 $663 $927 $695
Weighted average $565 $482 $548 $464
total cash costs
per ounce
Note 1
Gross mine profit is calculated as total revenues from all metals, by
mine, minus total production costs, by mine.
Note 2
Creston Mascota achieved commercial production as of March 1, 2011. All
payable production ounces are post commercial production as they were
sold after March 1, 2011.
Note 3
Total cash costs per ounce of gold is calculated net of silver, copper,
zinc and other byproduct credits. The weighted average total cash cost
per ounce is based on commercial production ounces. Total cash costs
per ounce is a non-GAAP measure. For a reconciliation to production
costs, see Note 1 to the financial statements. See also 'Note
Regarding Certain Measures of Performance'.
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED BALANCE SHEETS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
As at As at
June 30, 2011 December 31, 2010
ASSETS
Current
Cash and cash equivalents $138,959 $104,645
Trade receivables 64,821 112,949
Inventories:
Ore stockpiles 66,130 67,764
Concentrates 66,905 50,332
Supplies 186,852 149,647
Other current assets 202,131 188,885
Fair value of derivative 2,148 -
assets
Total current assets 727,946 674,222
Other assets 63,295 61,502
Future income and mining tax 2,771 -
assets
Goodwill 200,064 200,064
Property, plant and mine 4,647,580 4,564,563
development
$5,641,656 $5,500,351
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current
Accounts payable and accrued $222,007 $170,967
liabilities
Dividends payable 53,964 108,009
Interest payable 9,808 9,743
Income taxes payable 8,028 14,450
Fair value of - 142
derivative
financial
instruments
Total current liabilities 293,807 303,311
Long term debt 600,000 650,000
Reclamation provision and other 150,033 145,536
liabilities
Future income and mining tax 770,832 736,054
liabilities
Shareholders' equity
Common shares
Authorized — unlimited
Issued — 169,207,761 3,102,141 3,078,217
(December 31, 2010 —
168,763,496)
Stock options 103,139 78,554
Warrants 24,858 24,858
Contributed surplus 15,166 15,166
Retained earnings 554,354 440,265
Accumulated other comprehensive 27,326 28,390
income
Total shareholders' equity 3,826,984 3,665,450
$5,641,656 $5,500,351
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(thousands of United States dollars except share and per share
amounts, US GAAP basis)
(Unaudited)
Three months ended Six months ended June
June 30, 30,
2011 2010 2011 2010
REVENUES
Revenues from $433,691 $347,456 $845,759 $585,039
mining operations
Interest and 757 6,488 2,356 7,315
sundry income
Gain on sale of 420 — 4,814 346
available-for-sale
securities
353,944 852,929 592,700
434,868
COSTS AND EXPENSES
Production 212,754 166,573 411,321 284,800
Exploration 17,289 12,955 34,267 20,459
and corporate
development
Amortization 59,235 44,003 121,164 74,506
General and 24,122 23,240 59,274 51,670
administrative
Provincial capital - 742 - 155
tax
Interest 13,989 15,309 27,997 19,813
Foreign currency 2,713 (17,427) 16,778 (8,526)
loss (gain)
Income before 104,766 108,549 182,128 149,823
income, mining and
federal capital
taxes
Income and mining 35,941 8,189 68,039 27,131
tax expense
(recovery)
Net income for the $68,825 $100,360 $114,089 $122,692
period
Net income per $0.41 $0.64 $0.68 $0.78
share —
basic
Net income per $0.40 $0.63 $0.66 $0.77
share —
diluted
Weighted average
number of shares
outstanding
(in thousands)
Basic 169,029 156,899 168,949 156,789
Diluted 172,448 159,920 172,632 159,585
AGNICO-EAGLE MINES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of United States dollars, US GAAP basis)
(Unaudited)
Three months ended June Six months ended June
30, 30,
2011 2010 2011 2010
Operating activities
Net income for the $68,825 $100,360 $114,089 $122,692
period
Add (deduct) items
not affecting cash:
Amortization 59,235 44,003 121,164 74,506
Future income and 17,035 431 25,914 13,526
mining taxes
Gain on sale of
available-for-sale
securities and
derivative
financial
instruments (534) (3,716) (6,962) (4,175)
Amortization of 17,135 (2,179) 54,438 24,881
deferred costs and
other
Changes in non-cash
working capital
balances
Trade receivables 6,745 7,826 48,128 28,216
Income taxes 550 10,771 (12,507) 14,695
payable
Inventories (37,667) (16,068) (54,262) (41,610)
Other current (9,525) (16,903) (5,059) (20,785)
assets
Interest payable (10,705) 8,562 65 8,223
Accounts payable 51,727 28,487 48,856 15,896
and accrued
liabilities
Cash provided by 162,821 161,574 333,864 236,065
operating
activities
Investing activities
Additions to (114,402) (117,017) (211,251) (229,580)
property, plant and
mine development
Acquisition, (2,154) 733 2,045 (4,909)
investments and
other
Cash used in (116,556) (116,284) (209,206) (234,489)
investing
activities
Financing activities
Dividends paid (23,313) — (49,133) (26,830)
Repayment of capital (4,186) (8,573) (7,239) (10,112)
lease and other
Proceeds from long 80,000 1,101,000 80,000 1,201,000
term debt
Repayment of long (80,000) (1,101,000) (130,000) (1,181,000)
term debt
Sales-leaseback — — — 3,005
financing
Credit facility — (12,488) — (12,488)
financing cost
Proceeds from common 5,319 10,639 15,350 14,357
shares issued
Cash provided by (22,180) (10,422) (91,022) (12,068)
(used in) financing
activities
Effect of exchange
rate changes on cash
and cash
equivalents 49 (134) 678 (315)
Net increase
(decrease) in cash
and cash equivalents
during the period 24,134 34,734 34,314 (10,807)
Cash and cash 114,825 118,052 104,645 163,593
equivalents,
beginning of period
Cash and cash $138,959 $152,786 $138,959 $152,786
equivalents, end of
period
Other operating cash
flow information:
Interest paid during $23,075 $4,708 $26,304 $13,430
the period
Income, mining and $14,537 $— $49,756 $1,497
capital taxes paid
during the period
Note 1 The following tables provide a reconciliation, on an individual mine
basis, of the total cash costs per ounce of gold produced and minesite
costs per tonne to production costs as set out the interim consolidated
financial statements:
Total Cash
Costs per
Ounce of Gold
By Mine
(thousands of Three months Three months Six months Six months
dollars, ended ended ended ended
except where June 30, June 30, June 30, June 30,
noted) 2011 2010 2011 2010
Total
Production
costs per
Consolidated
Statements of
Income $212,754 $166,573 $411,321 $284,800
Attributable 54,457 46,605 102,342 92,087
to LaRonde
Attributable 16,357 16,469 34,231 30,269
to Goldex
Attributable 17,333 17,830 34,084 34,209
to Lapa
Attributable 25,961 18,100 54,461 41,118
to Kittila
Attributable 38,085 18,537 68,992 32,386
to Pinos Altos
Attributable 60,561 49,032 117,211 54,731
to Meadowbank
Total $212,754 $166,573 $411,321 $284,800
LaRonde
(thousands of Three months Three months Six months Six months
dollars, ended ended ended ended
except where June 30, June 30, June 30, June 30,
noted) 2011 2010 2011 2010
Production $54,457 $46,605 $102,342 $92,087
costs
Adjustments:
Byproduct (45,516) (39,252) (98,495) (77,643)
revenues
Inventory
adjustment(
(i)) (1,899) 4,203 3,453 4,967
Non-cash (684) (337) (1,384) (672)
reclamation
provision
Cash operating $6,358 $11,219 $5,916 $18,739
costs
Gold 27,525 41,533 64,418 86,569
production
(ounces)
Total cash
costs
(per ounce)(
(iii)) $231 $270 $92 $216
Goldex
(thousands of Three months Three months Six months Six months
dollars, ended ended ended ended
except where June 30, June 30, June 30, June 30,
noted) 2011 2010 2011 2010
Production $16,357 $16,469 $34,231 $30,269
costs
Adjustments:
Byproduct 107 (8) 194 (14)
revenues
Inventory
adjustment(
(i)) (224) (690) (1,533) 1,411
Non-cash (58) (54) (113) (108)
reclamation
provision
Cash operating $16,182 $15,717 $32,779 $31,558
costs
Gold 41,998 48,334 80,498 90,603
production
(ounces)
Total cash
costs
(per ounce)(
(iii)) $385 $325 $407 $348
Lapa
(thousands of Three months Three months Six months Six months
dollars, ended ended ended ended
except where June 30, June 30, June 30, June 30,
noted) 2011 2010 2011 2010
Production $17,333 $17,830 $34,084 $34,209
costs
Adjustments:
Byproduct 157 (7) 223 (27)
revenues
Inventory
adjustment(
(i)) (366) (2,038) (208) (2,964)
Non-cash (15) (14) (30) (28)
reclamation
provision
Cash operating $17,109 $15,771 $34,069 $31,190
costs
Gold 28,552 28,927 55,466 60,480
production
(ounces)
Total cash
costs
(per ounce)(
(iii)) $599 $545 $614 $516
Kittila
(thousands of Three months Three months Six months Six months
dollars, ended ended ended ended
except where June 30, June 30, June 30, June 30,
noted) 2011 2010 2011 2010
Production $25,961 $18,100 $54,461 $41,118
costs
Adjustments:
Byproduct 15 (5) 92 (30)
revenues
Inventory
adjustment(
(i)) 2,920 1,146 2,077 (3,702)
Non-cash (55) (65) (105) (164)
reclamation
provision
Stripping
(capitalized
vs expensed)
((ii)) (2,643) - (2,643) -
Cash operating $26,198 $19,176 $53,882 $37,222
costs
Gold 30,811 31,593 71,128 56,140
production
(ounces)
Total cash
costs
(per ounce)(
(iii)) $850 $607 $758 $663
Pinos Altos
(includes
Creston
Mascota)
(thousands of Three months Three months Six months Six months
dollars, ended ended ended ended
except where June 30, June 30, June 30, June 30,
noted) 2011 2010 2011 2010
Production $38,085 $18,537 $68,992 $32,386
costs
Adjustments:
Byproduct (15,986) (4,885) (30,989) (8,572)
revenues
Inventory
adjustment(
(i)) 292 (1,115) 5,989 378
Non-cash (348) (214) (630) (428)
reclamation
provision
Stripping
(capitalized
vs expensed)
((ii)) (6,765) (1,477) (13,090) (2,288)
Cash operating $15,278 $10,846 $30,272 $21,476
costs
Gold 51,066 29,665 99,067 55,893
production
(ounces)
Total cash
costs
(per ounce)(
(iii)) $299 $365 $306 $384
Meadowbank
(thousands of Three months Three months Six months Six months
dollars, ended ended ended ended
except where June 30, June 30, June 30, June 30,
noted) 2011 2010 2011 2010
Production $60,561 $49,032 $117,211 $54,731
costs
Adjustments:
Byproduct (395) (232) (844) (258)
revenues
Inventory
adjustment(
(i)) 260 3,031 2,686 12,192
Non-cash (427) (367) (839) (494)
reclamation
provision
Stripping
(capitalized
vs expensed)
((ii)) (5,950) - (5,950) -
Cash operating $54,049 $51,464 $112,264 $66,171
costs
Gold 59,376 77,676 121,113 95,191
production
(ounces)
Total cash
costs
(per ounce)(
(iii)) $910 $663 $927 $695
Minesite
Cost per
Tonne
LaRonde
(thousands Three months Three months Six months Six months
of dollars, ended ended ended ended
except where June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010
noted)
Production $54,457 $46,605 $102,342 $92,087
costs
Adjustments:
Inventory (2,055) 4,203 2,462 4,967
adjustments
(iv)
Non-cash (684) (337) (1,384) (672)
reclamation
provision
Minesite $51,718 $50,471 $103,420 $96,382
operating
costs (US$)
Minesite $50,259 $52,125 $100,616 $99,202
operating
costs (C$)
Tonnes of 599 660 1,184 1,324
ore milled
(000s)
Minesite $84 $79 $85 $75
cost per
tonne (C$)
(v)
Goldex
(thousands Three months Three months Six months Six months
of dollars, ended ended ended ended
except where June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010
noted)
Production $16,357 $16,469 $34,231 $30,269
costs
Adjustments:
Inventory (20) (690) (1,181) 1,411
adjustments
(iv)
Non-cash (58) (54) (113) (108)
reclamation
provision
Minesite $16,279 $15,725 $32,937 $31,572
operating
costs (US$)
Minesite $15,658 $16,197 $31,985 $32,510
operating
costs (C$)
Tonnes of 769 667 1,484 1,334
ore milled
(000s)
Minesite $20 $24 $22 $24
cost per
tonne (C$)
(v)
Lapa
(thousands Three months Three months Six months Six months
of dollars, ended ended ended ended
except where June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010
noted)
Production $17,333 $17,830 $34,084 $34,209
costs
Adjustments:
Inventory (274) (2,038) 32 (2,964)
adjustments
(iv)
Non-cash (15) (14) (30) (28)
reclamation
provision
Minesite $17,044 $15,778 $34,086 $31,217
operating
costs (US$)
Minesite $16,289 $16,347 $32,929 $32,179
operating
costs (C$)
Tonnes of 160 139 302 267
ore milled
(000s)
Minesite $102 $118 $109 $120
cost per
tonne (C$)
(v)
Kittila
(thousands Three months Three months Six months Six months
of dollars, ended ended ended ended
except where June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010
noted)
Production $25,961 $18,100 $54,461 $41,118
costs
Adjustments:
Inventory 2,920 1,146 2,077 (3,702)
adjustments
(iv)
Non-cash (55) (65) (105) (164)
reclamation
provision
Stripping (2,643) - (2,643) -
(capitalized
vs expensed)
(ii)
Minesite $26,183 $19,181 $53,790 $37,252
operating
costs (US$)
Minesite €18,395 €14,111 €38,105 €28,026
operating
costs (EUR)
Tonnes of 233 220 495 437
ore milled
(000s)
Minesite €79 €64 €77 €64
cost per
tonne (EUR)
(v)
Pinos Altos
(includes
Creston
Mascota)
(thousands Three months Three months Six months Six months
of dollars, ended ended ended ended
except where June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010
noted)
Production $38,085 $18,537 $68,992 $32,386
costs
Adjustments:
Inventory (181) (1,115) 4,883 378
adjustments
(iv)
Non-cash (348) (214) (630) (428)
reclamation
provision
Stripping (6,765) (1,477) (13,090) (2,288)
(capitalized
vs expensed)
(ii)
Minesite $30,791 $15,731 $60,155 $30,048
operating
costs (US$)
Tonnes of 1,114 553 2,147 1,004
ore
processed
(000s)
Minesite $28 $28 $28 $30
cost per
tonne (US$)
(v)
Meadowbank
(thousands Three months Three months Six months Six months
of dollars, ended ended ended ended
except where June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010
noted)
Production $60,561 $49,032 $117,211 $54,731
costs
Adjustments:
Inventory 1,193 3,031 3,965 12,192
adjustments
(iv)
Non-cash (427) (367) (839) (494)
reclamation
provision
Stripping (5,950) - (5,950) -
(capitalized
vs expensed)
(ii)
Minesite $55,377 $51,696 $114,387 $66,429
operating
costs (US$)
Minesite $53,939 $53,642 $112,181 $68,759
operating
costs (C$)
Tonnes of 667 570 1,296 733
ore milled
(000s)
Minesite $81 $94 $87 $94
cost per
tonne (C$)
(v)
(i) Under the Company's revenue recognition policy, revenue is
recognized on concentrates when legal title passes. Since
total cash costs are calculated on a production basis,
this inventory adjustment reflects the sales margin on the
portion of concentrate production for which revenue has
not been recognized in the period.
(ii) The Company has decided to report total cash costs using
the more common industry practice of deferring certain
stripping costs that can be attributed to future
production. The methodology is in line with the Gold
Institute Production Cost Standard. The purpose of
adjusting for these stripping costs is to enhance the
comparability of cash costs to the majority of the
Company's peers within the mining industry. The previous
period's cash costs have been adjusted accordingly also.
(iii) Total cash cost per ounce is not a recognized measure
under US GAAP and this data may not be comparable to data
presented by other gold producers. The Company believes
that this generally accepted industry measure is a
realistic indication of operating performance and is
useful in allowing year over year comparisons. As
illustrated in the table above, this measure is calculated
by adjusting production costs as shown in the Consolidated
Statements of Income and Comprehensive Income for net
byproduct revenues, royalties, inventory adjustments and
asset retirement provisions. This measure is intended to
provide investors with information about the cash
generating capabilities of the Company's mining
operations. Management uses this measure to monitor the
performance of the Company's mining operations. Since
market prices for gold are quoted on a per ounce basis,
using this per ounce measure allows management to assess
the mine's cash generating capabilities at various gold
prices. Management is aware that this per ounce measure of
performance can be impacted by fluctuations in byproduct
metal prices and exchange rates. Management compensates
for the limitation inherent with this measure by using it
in conjunction with the minesite costs per tonne measure
(discussed below) as well as other data prepared in
accordance with US GAAP. Management also performs
sensitivity analyses in order to quantify the effects of
fluctuating metal prices and exchange rates.
(iv) This inventory adjustment reflects production costs
associated with unsold concentrates.
(v) Minesite costs per tonne is not a recognized measure under
US GAAP and this data may not be comparable to data
presented by other gold producers. As illustrated in the
table above, this measure is calculated by adjusting
production costs as shown in the Consolidated Statements
of Income and Comprehensive Income for inventory and asset
retirement provisions and then dividing by tonnes
processed through the mill. Since total cash costs data
can be affected by fluctuations in byproduct metal prices
and exchange rates, management believes minesite costs per
tonne provides additional information regarding the
performance of mining operations and allows management to
monitor operating costs on a more consistent basis as the
per tonne measure eliminates the cost variability
associated with varying production levels. Management also
uses this measure to determine the economic viability of
mining blocks. As each mining block is evaluated based on
the net realizable value of each tonne mined, in order to
be economically viable the estimated revenue on a per
tonne basis must be in excess of the minesite costs per
tonne. Management is aware that this per tonne measure is
impacted by fluctuations in production levels and thus
uses this evaluation tool in conjunction with production
costs prepared in accordance with US GAAP. This measure
supplements production cost information prepared in
accordance with US GAAP and allows investors to
distinguish between changes in production costs resulting
from changes in production versus changes in operating
performance.
Note Regarding Certain Measures of Performance
This press release presents measures including 'total cash costs per
ounce' and 'minesite costs per tonne' that are not recognized measures
under US GAAP. This data may not be comparable to data presented by
other gold producers. The Company believes that these generally
accepted industry measures are realistic indicators of operating
performance and useful for year-over-year comparisons. However, both of
these non-GAAP measures should be considered together with other data
prepared in accordance with US GAAP, these measures, taken by
themselves, are not necessarily indicative of operating costs or cash
flow measures prepared in accordance with US GAAP. A reconciliation of
the Company's total cash cost per ounce and minesite cost per tonne to
the most comparable financial measures calculated and presented in
accordance with US GAAP for the Company's historical results of
operations is set out in Note 1 to the financial statements of the
Company for the period ended December 31, 2010 contained herein.
The contents of this press release have been prepared under the
supervision of, and reviewed by, Marc Legault P.Eng., Vice-President
Project Development and a 'Qualified Person' for the purposes of NI
43-101.
Detailed Mineral Reserve and Resource Data (as at December 31, 2010)
_____________________________________________________________________
| |Au |Ag |Cu |Zn |Pb |Au |Tonnes|
|Category and |(g/t) |(g/t) |(%) |(%) |(%) |(000s oz.) |(000s)|
|Operation | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
|Proven Mineral Reserve |
|_____________________________________________________________________|
|Goldex |1.87 | | | | | 890|14,804|
|(underground) | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
| Kittila |4.19 | | | | | 53| 395|
|(open pit) | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
| Kittila |6.00 | | | | | 2| 8|
|(underground) | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
|Kittila total |4.23 | | | | | 55| 403|
|proven | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
|Lapa |7.24 | | | | | 261| 1,122|
|(underground) | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
|LaRonde |2.36 |55.17 |0.26 |2.78 |0.32 | 366| 4,838|
|(underground) | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
|Meadowbank |3.13 | | | | | 85| 839|
|(open pit) | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
|Pinos Altos |0.89 |13.26 | | | | 31| 1,078|
|(open pit) | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
|Pinos Altos |2.52 |78.68 | | | | 144| 1,786|
|(underground) | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
|Pinos Altos |1.90 |54.06 | | | | 175| 2,864|
|total proven | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
|Subtotal |2.29 | | | | | 1,832|24,869|
|Proven Mineral| | | | | | | |
|Reserve | | | | | | | |
|______________|______|_______|______|______|______|___________|______|
_____________________________________________________________________
|Probable Mineral Reserve |
|_____________________________________________________________________|
|Goldex |1.62 | | | | | 676| 12,990|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Kittila (open |5.28 | | | | | 281| 1,657|
|pit) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Kittila |4.61 | | | | | 4,544| 30,672|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Kittila total |4.64 | | | | | 4,826| 32,329|
|probable | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Lapa |7.56 | | | | | 416| 1,709|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|LaRonde |4.63 |23.99 |0.28 |0.90 |0.07 | 4,452| 29,892|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Meadowbank (open|3.18 | | | | | 3,402| 33,259|
|pit) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Meliadine |6.91 | | | | | 953| 4,287|
|(open pit) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Meliadine |9.89 | | | | | 1,647| 5,180|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Meliadine total |8.54 | | | | | 2,600| 9,467|
|probable | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Pinos Altos |1.98 |45.34 | | | | 1,083| 16,987|
|(open pit) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
| Pinos Altos |2.58 |79.64 | | | | 2,013| 24,311|
|(underground) | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Pinos Altos |2.33 |65.53 | | | | 3,096| 41,298|
|total probable | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Subtotal |3.76 | | | | | 19,467| 160,944|
|Probable Mineral| | | | | | | |
|Reserve | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
|Total Proven and|3.57 | | | | | 21,299| 185,813|
|Probable Mineral| | | | | | | |
|Reserves | | | | | | | |
|________________|______|_______|______|______|______|_______|________|
_____________________________________________________________________
|Category and Operation |Au |Ag |Cu |Zn |Pb |Tonnes |
| |(g/t) |(g/t) |(%) |(%) |(%) |(000s) |
|_________________________|______|_______|______|______|______|_______|
|Indicated Mineral | | | | | | |
|Resource | | | | | | |
|_________________________|______|_______|______|______|______|_______|
|Bousquet (underground) |5.63 | | | | | 1,704|
|_________________________|______|_______|______|______|______|_______|
|Ellison (underground) |5.68 | | | | | 415|
|_________________________|______|_______|______|______|______|_______|
|Goldex (underground) |1.77 | | | | | 8,273|
|_________________________|______|_______|______|______|______|_______|
|Kittila (underground) |2.41 | | | | | 15,348|
|_________________________|______|_______|______|______|______|_______|
|Lapa (underground) |4.10 | | | | | 1,770|
|_________________________|______|_______|______|______|______|_______|
|LaRonde (underground) |1.89 |23.96 |0.12 |1.36 |0.13 | 6,933|
|_________________________|______|_______|______|______|______|_______|
| Meadowbank (open pit) |1.40 | | | | | 23,441|
|_________________________|______|_______|______|______|______|_______|
| Meadowbank |4.39 | | | | | 2,318|
|(underground) | | | | | | |
|_________________________|______|_______|______|______|______|_______|
|Meadowbank total |1.67 | | | | | 25,759|
|indicated | | | | | | |
|_________________________|______|_______|______|______|______|_______|
| Meliadine (open pit) |5.25 | | | | | 1,968|
|_________________________|______|_______|______|______|______|_______|
| Meliadine (underground)|5.20 | | | | | 6,839|
|_________________________|______|_______|______|______|______|_______|
|Meliadine total indicated|5.21 | | | | | 8,807|
|_________________________|______|_______|______|______|______|_______|
| Pinos Altos (open pit) |0.88 |12.42 | | | | 15,832|
|_________________________|______|_______|______|______|______|_______|
| Pinos Altos |1.25 |35.76 | | | | 9,789|
|(underground) | | | | | | |
|_________________________|______|_______|______|______|______|_______|
|Pinos Altos total |1.02 |21.34 | | | | 25,621|
|indicated | | | | | | |
|_________________________|______|_______|______|______|______|_______|
|Swanson (open pit) |1.93 | | | | | 504|
|_________________________|______|_______|______|______|______|_______|
|Total Indicated Resource |2.10 | | | | | 95,135|
|_________________________|______|_______|______|______|______|_______|
_____________________________________________________________________
| |Au |Ag |Cu |Zn |Pb |Tonnes |
|Category and Operation |(g/t) |(g/t) |(%) |(%) |(%) |(000s) |
|________________________|______|_______|______|______|______|________|
|Inferred Mineral | | | | | | |
|Resource | | | | | | |
|________________________|______|_______|______|______|______|________|
| Bousquet (open pit) |1.87 | | | | | 18,798|
|________________________|______|_______|______|______|______|________|
| Bousquet (underground)|7.45 | | | | | 1,667|
|________________________|______|_______|______|______|______|________|
|Bousquet total inferred |2.32 | | | | | 20,464|
|________________________|______|_______|______|______|______|________|
|Ellison (underground) |5.81 | | | | | 786|
|________________________|______|_______|______|______|______|________|
|Goldex (underground) |1.67 | | | | | 25,813|
|________________________|______|_______|______|______|______|________|
| Kittila (open pit) |3.71 | | | | | 362|
|________________________|______|_______|______|______|______|________|
| Kittila (underground) |2.44 | | | | | 7,958|
|________________________|______|_______|______|______|______|________|
|Kittila total inferred |2.50 | | | | | 8,320|
|________________________|______|_______|______|______|______|________|
|Kuotko, Finland (open |3.24 | | | | | 1,116|
|pit) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Kylmäkangas, Finland |4.07 | | | | | 1,924|
|(underground) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Lapa (underground) |8.27 | | | | | 454|
|________________________|______|_______|______|______|______|________|
|LaRonde (underground) |3.72 |12.24 |0.27 |0.48 |0.05 | 11,526|
|________________________|______|_______|______|______|______|________|
| Meadowbank (open pit) |1.85 | | | | | 9,393|
|________________________|______|_______|______|______|______|________|
| Meadowbank |5.62 | | | | | 824|
|(underground) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Meadowbank total |2.15 | | | | | 10,218|
|inferred | | | | | | |
|________________________|______|_______|______|______|______|________|
| Meliadine (open pit) |4.86 | | | | | 2,388|
|________________________|______|_______|______|______|______|________|
| Meliadine |7.47 | | | | | 9,446|
|(underground) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Meliadine total inferred|6.94 | | | | | 11,834|
|________________________|______|_______|______|______|______|________|
| Pinos Altos (open pit)|0.87 |17.34 | | | | 21,913|
|________________________|______|_______|______|______|______|________|
| Pinos Altos |2.38 |59.24 | | | | 3,744|
|(underground) | | | | | | |
|________________________|______|_______|______|______|______|________|
|Pinos Altos total |1.09 |23.46 | | | | 25,657|
|inferred | | | | | | |
|________________________|______|_______|______|______|______|________|
|Total Inferred Resource |2.59 | | | | | 118,111|
|________________________|______|_______|______|______|______|________|
Tonnage amounts and contained metal amounts presented in this table have
been rounded to the nearest thousand. Reserves are not a sub-set of
resources. No measured resources were estimated.
Forward-Looking Statements
The information in this news release has been prepared as at July 27,
2011. Certain statements contained in this press release constitute
'forward-looking statements' within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and 'forward looking
information' under the provisions of Canadian provincial securities
laws and are referred to herein as 'forward-looking statements'. When
used in this document, words such as 'anticipate', 'expect',
'estimate,' 'forecast,' 'planned', 'will', 'likely', 'schedule' and
similar expressions are intended to identify forward-looking
statements.
Such statements include without limitation: the Company's
forward-looking production guidance, including estimated ore grades,
project timelines, drilling results, orebody configurations, metal
production, life of mine trends, production estimates, the estimated
timing of scoping and other studies, the methods by which ore will be
extracted or processed, recovery rates, mill throughput, and projected
exploration and capital expenditures, including costs and other
estimates upon which such projections are based; the Company's goal to
increase its mineral reserves and resources; and other statements and
information regarding anticipated trends with respect to the Company's
operations, exploration and the funding thereof. Such statements
reflect the Company's views as at the date of this press release and
are subject to certain risks, uncertainties and assumptions.
Forward-looking statements are necessarily based upon a number of
factors and assumptions that, while considered reasonable by
Agnico-Eagle as of the date of such statements, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. The factors and assumptions of Agnico-Eagle contained in
this news release, which may prove to be incorrect, include, but are
not limited to, the assumptions set forth herein and in management's
discussion and analysis and the Company's Annual Report on Form 20-F
for the year ended December 31, 2010 ('Form 20-F') as well as: that
there are no significant disruptions affecting operations, whether due
to labour disruptions, supply disruptions, damage to equipment, natural
occurrences, equipment failures, accidents, political changes, title
issues or otherwise; that permitting, production and expansion at each
of Agnico-Eagle's mines and growth projects proceeds on a basis
consistent with current expectations, and that Agnico-Eagle does not
change its plans relating to such projects; that the exchange rate
between the Canadian dollar, European Union euro, Mexican peso and the
United States dollar will be approximately consistent with current
levels or as set out in this news release; that prices for gold,
silver, zinc, copper and lead will be consistent with Agnico-Eagle's
expectations; that prices for key mining and construction supplies,
including labour costs, remain consistent with Agnico-Eagle's current
expectations; that Agnico-Eagle's current estimates of mineral
reserves, mineral resources, mineral grades and metal recovery are
accurate; that there are no material delays in the timing for
completion of ongoing growth projects; that the Company's current plans
to optimize production are successful; and that there are no material
variations in the current tax and regulatory environment. Many
factors, known and unknown, could cause the actual results to be
materially different from those expressed or implied by such
forward-looking statements. Such risks include, but are not limited to:
the volatility of prices of gold and other metals; uncertainty of
mineral reserves, mineral resources, mineral grades and metal recovery
estimates; uncertainty of future production, capital expenditures, and
other costs; currency fluctuations; financing of additional capital
requirements; cost of exploration and development programs; mining
risks; risks associated with foreign operations; governmental and
environmental regulation; the volatility of the Company's stock price;
and risks associated with the Company's byproduct metal derivative
strategies. For a more detailed discussion of such risks and other
factors, see the Form 20-F, as well as the Company's other filings with
the Canadian Securities Administrators and the U.S. Securities and
Exchange Commission (the 'SEC'). The Company does not intend, and does
not assume any obligation, to update these forward-looking statements
and information, except as required by law. Accordingly, readers are
advised not to place undue reliance on forward-looking statements.
Certain of the foregoing statements, primarily related to projects, are
based on preliminary views of the Company with respect to, among other
things, grade, tonnage, processing, recoveries, mining methods, capital
costs, total cash costs, minesite costs, and location of surface
infrastructure. Actual results and final decisions may be materially
different from those currently anticipated.
Notes to Investors Regarding the Use of Resources
Cautionary Note to Investors Concerning Estimates of Measured and
Indicated Resources
This news release uses the terms 'measured resources' and 'indicated
resources'. We advise investors that while those terms are recognized
and required by Canadian regulations, the SEC does not recognize them. Investors are cautioned not to assume that any part or all of mineral
deposits in these categories will ever be converted into reserves.
Cautionary Note to Investors Concerning Estimates of Inferred Resources
This press release also uses the term 'inferred resources'. We advise
investors that while this term is recognized and required by Canadian
regulations, the SEC does not recognize it. 'Inferred resources' have a
great amount of uncertainty as to their existence, and great
uncertainty as to their economic and legal feasibility. It cannot be
assumed that all or any part of an inferred mineral resource will ever
be upgraded to a higher category. Under Canadian rules, estimates of
inferred mineral resources may not form the basis of feasibility or
pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that part or all of an inferred
resource exists, or is economically or legally mineable.
Scientific and Technical Data
Agnico-Eagle Mines Limited is reporting mineral resource and reserve
estimates in accordance with the CIM guidelines for the estimation,
classification and reporting of resources and reserves.
Cautionary Note To U.S. Investors - The SEC permits U.S. mining companies, in their filings with the SEC,
to disclose only those mineral deposits that a company can economically
and legally extract or produce. Agnico-Eagle uses certain terms in this
press release, such as 'measured', 'indicated', and 'inferred', and
'resources' that the SEC guidelines strictly prohibit U.S. registered
companies from including in their filings with the SEC. U.S. investors
are urged to consider closely the disclosure in our Form 20-F, which
may be obtained from us, or from the SEC's website at: http://sec.gov/edgar.shtml. A 'final' or 'bankable' feasibility study is required to meet the
requirements to designate reserves under Industry Guide 7.
Estimates for all properties were calculated using historic three-year
average metals prices and foreign exchange rates in accordance with the
SEC Industry Guide 7. Industry Guide 7 requires the use of prices that
reflect current economic conditions at the time of reserve
determination, which the Staff of the SEC has interpreted to mean
historic three-year average prices. The assumptions used for the
mineral reserves and resources estimates reported by the Company on
February 16, 2011 were based on three-year average prices for the
period ending December 31, 2010 of $1,024 per ounce gold, $16.62 per
ounce silver, $0.86 per pound zinc, $2.97 per pound copper, $0.90 per
pound lead and C$/US$, US$/Euro and MXP/US$ exchange rates of 1.08,
1.40 and 12.43, respectively.
The Canadian Securities Administrators' National Instrument 43-101 ('NI
43-101') requires mining companies to disclose reserves and resources
using the subcategories of 'proven' reserves, 'probable' reserves,
'measured' resources, 'indicated' resources and 'inferred' resources.
Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
A mineral reserve is the economically mineable part of a measured or
indicated resource demonstrated by at least a preliminary feasibility
study. This study must include adequate information on mining,
processing, metallurgical, economic and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can be
justified. A mineral reserve includes diluting materials and allows for
losses that may occur when the material is mined. A proven mineral
reserve is the economically mineable part of a measured resource for
which quantity, grade or quality, densities, shape and physical
characteristics are so well established that they can be estimated with
confidence sufficient to allow the appropriate application of technical
and economic parameters, to support production planning and evaluation
of the economic viability of the deposit. A probable mineral reserve is
the economically mineable part of an indicated mineral resource for
which quantity, grade or quality, densities, shape and physical
characteristics can be estimated with a level of confidence sufficient
to allow the appropriate application of technical and economic
parameters, to support mine planning and evaluation of the economic
viability of the deposit.
A mineral resource is a concentration or occurrence of natural, solid,
inorganic or fossilized organic material in or on the Earth's crust in
such form and quantity and of such a grade or quality that it has
reasonable prospects for economic extraction. The location, quantity,
grade, geological characteristics and continuity of a mineral resource
are known, estimated or interpreted from specific geological evidence
and knowledge. A measured mineral resource is that part of a mineral
resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the
economic viability of the deposit. The estimate is based on detailed
and reliable exploration, sampling and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely enough
to confirm both geological and grade continuity. An indicated mineral
resource is that part of a mineral resource for which quantity, grade
or quality, densities, shape and physical characteristics can be
estimated with a level of confidence sufficient to allow the
appropriate application of technical and economic parameters, to
support mine planning and evaluation of the economic viability of the
deposit. The estimate is based on detailed and reliable exploration and
testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes
that are spaced closely enough for geological and grade continuity to
be reasonably assumed. An inferred mineral resource is that part of a
mineral resource for which quantity and grade or quality can be
estimated on the basis of geological evidence and limited sampling and
reasonably assumed, but not verified, geological and grade continuity.
The estimate is based on limited information and sampling gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. Mineral resources which are
not mineral reserves do not have demonstrated economic viability.
Investors are cautioned not to assume that part or all of an inferred
resource exists, or is economically or legally mineable.
A Feasibility Study is a comprehensive technical and economic study of
the selected development option for a mineral project that includes
appropriately detailed assessments of realistically assumed mining,
processing, metallurgical, economic, marketing, legal, environmental,
social and governmental considerations together with any other relevant
operational factors and detailed financial analysis, that are necessary
to demonstrate at the time of reporting that extraction is reasonably
justified (economically mineable). The results of the study may
reasonably serve as the basis for a final decision by a proponent or
financial institution to proceed with, or finance, the development of
the project. The confidence level of the study will be higher than that
of a Pre-Feasibility Study.
The mineral reserves presented in this disclosure are separate from and
not a portion of the mineral resources.
_____________________________________________________________________
|Property/Project|Qualified Person|Qualified Person |Date of most |
|name and |responsible for |responsible for |recent |
|location |the |Exploration and |Technical Report |
| |current Mineral |relationship to |(NI 43-101) filed|
| |Resource and |Agnico-Eagle |on |
| |Reserve Estimate| |SEDAR |
| |and | | |
| |relationship to | | |
| |Agnico-Eagle | | |
|________________|________________|_________________|_________________|
|LaRonde, |François |François Blanchet|March 23, 2005 |
|Bousquet & |Blanchet Ing., |Ing., LaRonde | |
|Ellison, Quebec,|LaRonde Division|Division | |
|Canada |Superintendent |Superintendent of| |
| |of geology |geology | |
|________________|________________|_________________|_________________|
|Kittila, Kuotko |Daniel Doucet, |Marc Legault |March 4, 2010 |
|and Kylmakangas,|Ing., Corporate |P.Eng., VP | |
|Finland |Director of |Project | |
| |Geology |Development | |
|________________|________________|_________________|_________________|
|Pinos Altos, |Dyane Duquette, |Mine site: Dyane |March 25, 2009 |
|Chihuahua, |P.Geo., |Duquette, P.Geo.;| |
|Mexico. |Superintendent |Regional: Roger | |
|Swanson, Quebec,|of geology, |Doucet, P.Geo., | |
|Canada |Technical |Exploration | |
| |Services Group |manager for | |
| | |Mexico | |
|________________|________________|_________________|_________________|
|Meadowbank, |Bruno Perron |Mine site: Bruno |December 15, 2008|
|Nunavut, Canada |P.Eng., |Perron P.Eng., | |
| |Meadowbank |Meadowbank | |
| |Superintendent |Division | |
| |of geology |Superintendent of| |
| | |geology; | |
| | |Regional: Guy | |
| | |Gosselin Ing., VP| |
| | |Exploration | |
|________________|________________|_________________|_________________|
|Goldex, Quebec, |Richard Genest, |Richard Genest, |October 27, 2005 |
|Canada |Ing., Goldex |Ing., Goldex | |
| |Division |Division | |
| |Superintendent |Superintendent of| |
| |of geology |geology | |
|________________|________________|_________________|_________________|
|Lapa, Quebec, |Normand Bédard, |Normand Bédard, |June 8, 2006 |
|Canada |P.Geo., Lapa |P.Geo., Lapa | |
| |Division |Division | |
| |Superintendent |Superintendent of| |
| |of geology |geology | |
|________________|________________|_________________|_________________|
|Meliadine, |Dyane Duquette, |Denis |March 8, 2011 |
|Nunavut, Canada |P.Geo., |Vaillancourt, | |
| |Superintendent |P.Geo., | |
| |of geology, |Exploration | |
| |Technical |manager for | |
| |Services Group |eastern Canada | |
|________________|________________|_________________|_________________|
The effective date for all of the Company's mineral resource and reserve
estimates in this press release is December 31, 2010. Additional
information about each of the mineral projects that is required by NI
43-101, sections 3.2 and 3.3 and paragraphs 3.4 (a), (c) and (d) can be
found in the Technical Reports referred to above, which may be found at
www.sedar.com. Other important operating information can be found in the Company's
Form 20-F and its news releases dated December 15, 2010 and February
16, 2011.
The contents of this press release have been prepared under the
supervision of, and reviewed by, Marc Legault P.Eng., Vice-President
Project Development and a 'Qualified Person' for the purposes of NI
43-101.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/July2011/27/c7881.html
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